Paying for the Future

North Carolina’s college system seems like a great deal. There are plenty of really exceptional schools and the tuition and fees for in-state (or “resident”) students range from approximately $3,000 to $5,500 per year. Still, once books and living expenses are added into the equation, the cost of higher education can put a crimp on a family’s budget, particularly if more than one child is planning on attending college or if a student is considering a private school. Most parents will be relieved to know that there are many options for grants, scholarships and loans. With a little research, the concern for parents could be getting their kid into the college of her choice rather than how they will pay for it.

What Kind of Money is Available?

Several kinds of funding are available for college expenses. For virtually any family, there is some possibility for assistance. Perhaps the most desirable college money is the kind that comes with no strings attached and no repayment requirements. This wonderful funding is usually referred to as “grant money” or “scholarships.”

Steve Brooks, Executive Director of the North Carolina State Education Assistance Authority, says the terms ‘grant’ and ‘scholarship’ are often used interchangeably and mean the gift of aid that does not have to be repaid. Brooks adds, “There are federal grants, state grants and scholarships, and campus-specific scholarships available. Federal and North Carolina state grants are generally based on formulas that measure the ability to pay the full costs of education, with family income being the primary consideration.”

There are special funds ear-marked for high-achieving students (merit-based) and for families that cannot afford the expense of college (need-based). However, there are also specific scholarships that look for a very specialized student. “Colleges offer a wide variety of scholarships. Some have few restrictions; others are specific to people from certain counties, certain faiths, certain intended major areas of study, and other factors,” Brooks says.

Merit-Based Aid

Merit-based scholarships are defined with very specific students in mind. However, that student may be yours! Colleges are known for looking for students to fill niches so from school to school the definition of merit-based varies.

“Merit-based aid is in the eye of the donor,” Brooks says. “Students who are not even admitted on some campuses may be offered ‘merit’ awards on others, depending on qualifications. Students should look at each college to see what it is offering and whether or not they meet the general profile of ‘merit’ as that college defines it.”

Brooks also advises to think beyond just grades when considering possible merit-based opportunities. “’Merit’ may mean more than academics and leadership potential– it could include athletic, drama, music, debate, or many other talents as well,” he says. If your child is particularly gifted at something, there is a good chance that a scholarship for that ability may be available.

An additional kind of merit-based aid is hinged on a student’s plans for his future. These grants look for gifted students who plan on a specific line of work that is needed regionally.

“One other kind of grant should be mentioned: it is a conditional grant based on planned vocational interest. For example, North Carolina offers grants to students planning careers in teaching and in nursing. These grants, unlike ‘pure’ scholarships, are repaid after graduation by working in the chosen vocation within the state,” Brooks says. So students who are confident in their career path in one of these fields can have a ready source of college assistance. However, the caveat in taking these scholarships is that the student is required to follow through with these plans. Cautions Brooks, “Students who change their plans must repay in cash, with interest.”

Students should pay particular attention to their high school interests but should be conservative about bragging about their achievements in order to qualify for scholarships. The first step is really understanding what is available and then ensuring they qualify.

“Scholarship committees have lots of experience in evaluating applicants, and they are not easily fooled into choosing unqualified recipients,” Brooks says.

Look around for members of the community, teachers, and coaches familiar with your student’s achievements. These folks can provide the best recommendations, which usually include personal stories of their involvement with your child. “Among the things to do is to get references who are unrelated to the student’s family but who know the student well and can speak to his or her qualifications with specificity,” Brooks says.

And don’t put too much emphasis on quantity of achievement. Stacking on hobbies and extracurricular activities in an attempt to get the notice of a scholarship committee is probably not a good route.

“Clearly leadership potential and community involvement are helpful, but padding a resume with too many activities rather than deeper involvement in a few areas may be counterproductive,” Brooks says.

Need-Based Aid

If your family simply cannot afford college, don’t give up. According to Brooks, the majority of the funding available is based on need so that families with a talented student but not cash can find an opportunity for their child.

“Most grants are need based – that is, consideration is based on a formula that takes into consideration the ability of a student and his or her family to pay the costs of attending a given college. The formulas are based most heavily on family income but also take net worth into consideration as well in some cases,” Brooks says. “The idea behind need-based grants and scholarships is that no student should be denied access to higher education because of inability to pay. Willingness to pay is not the issue; ability to pay is the concern. So of course there are some people who do not qualify for need-based aid who believe that they should. But there may be even more people who do not apply for these grants because they don’t believe they will qualify. The higher the cost of the college, the more likely it is that middle-income families will qualify for aid.”

In other words, don’t make any assumptions about whether or not your family will be able to get help. Ask for the money and wait to see what happens.

Loans and Work-Study

The last kind of money available to students is probably the least attractive: loans and work-study.

Loans are sources of funding which are drawn by the parent or the student to pay for college and require full repayment usually with some level of interest. Some of these programs are offered by federal or state governments and some are offered by private loan companies. In recent years, some loan programs have come under scrutiny for offering money to students directly with very high interest rates. A good rule of thumb is that any time a family or student is required to repay the loan, they should carefully read the fine print and ensure they know exactly what they are getting into.

Work-study programs are usually need-based programs that allow the student to work at the university or in partnership with the university in order to pay towards the tuition and expenses (room and board, etc.) associated with college. These programs sometimes have restrictions on the number of hours a student can work or the kind of work the student can perform, but in many cases they offer students an opportunity to gain work experience in a field that they may be interested in pursuing in the future.

The biggest challenge with paying for college may be the process of figuring out just what is best for a certain family. “The most important piece of advice I can give is to do your homework,” Brooks says. “Know the forms that are required and deadlines for receipt of those forms for each campus that you are interested in exploring. And then meet the earliest of those deadlines.”

Where to Start

Start by getting informed. Make a list of the colleges that your child wants to attend. Evaluate the entry requirements to make sure that your child is a good candidate and then gather all the information you can about the total expense of your child attending that school. Think about factors other than tuition when committing to this process. Other expenses include room and board (unless the university is within driving distance), books, fees and supplies associated with specific majors, travel and the cost of moving or storing belongings at the start and end of each school year. Then, a family should evaluate their own income and savings to see what they can afford. Beyond that, financial aid in the form of scholarships, grants, work-study, and loans should be evaluated to fill in the gaps.

“There are essentially three ways that students and families pay for higher education in the United States,” Brooks says. “They use a combination of savings, loans, and current income to meet the costs of education. Supplementing those three ways to pay is a financial aid process that provides essential assistance to those who are unable to afford higher education as well as recognition for those who possess certain talents or attributes desired by a given college.”

A good education is essential for success in the future. College can be one path to getting that leg up for your kid. Though it may require thorough research and perhaps several years of loan repayment, everyone has an opportunity to get the skills and education they need to secure their goals and dreams.

For more information about applications, loans, and scholarships for North Carolina Schools, check out: http://www.CFNC.org.